March 04, 2013

RelayRides - Make Your Car Pay for Itself by Renting It to Someone Else

A year ago, San Francisco-based RelayRides launched nationwide with the idea that, just like people are willing to rent their homes to strangers to make some extra money, they’d be willing to do the same with their cars.

Today the company says it’s proven its point, announcing that vehicles in its peer-to-peer car-renting network are now available in all 50 states.

The last states to fall were the Dakotas, says Steve Webb, a company spokesman. Though the Great Plains aren’t the geography most commonly associated with trendy sharing-economy apps,RelayRides likes to make the point that its service makes as much sense in a rural area as in a city.

Rent-by-the-hour car-sharing companies like Zipcar need the more frequent usage that comes with urban density to cover the cost of maintaining a fleet, Webb says. Peer-to-peer car-sharing doesn’t have that issue, since the cars’ owners would be paying for the upkeep of their vehicles anyway.

At the moment, RelayRides says vehicles in its network are available in 1,366 cities and towns across the country (see above). Though it won’t disclose an exact number, the company says thousands of cars are being rented to tens of thousands of drivers.

As with other digitally driven sharing-economy services, such as Uber for taxis or AirBnb for lodging, RelayRides runs on the realization that there’s money to be made in idleness. According to the company, most cars sit unused about 92 percent of the time. And while it sits, your car is doing one thing: depreciating.

RelayRides’ pitch to car owners is that now you can make your car earn its keep. The average monthly cost of car ownership is $233 per month. The average car owner who rents his or her vehicle out through RelayRides, meanwhile, brings in an average of $250 per month. That’s the equivalent of renting your car out just a few hours per week.

RelayRides depends on a fairly stringent screening process to weed out bad drivers from taking your car into a ditch. In addition to having cars in all 50 states, the company is also linked up to all 50 state DMVs. Too many moving violations and you can’t rent using RelayRides.

The cars themselves are screened by the drivers themselves, who leave feedback and star-ratings after they’re done driving much as they would rate a seller after buying something on eBay. And this isn’t surprising: RelayRides CEO Andre Haddad once worked as head of product for eBay’s multi-billion-dollar global marketplace.

That experience in managing one of the world’s largest platforms for peer-to-peer buying and selling makes Haddad a good fit for RelayRides, which he says is all about changing the way people think about their relationships to cars. Instead of a car being something to be owned, a car is something to used.

“The way people use cars hasn’t really changed much in the past century,” Haddad says. RelayRides wants to be that change.

“It’s a business model innovation,” Haddad says. “It’s the same car. We’re not changing car technology. We’re changing the way people use cars.”